From mercantilism and physiocracy until today. I. Introduction Economics is the social science that studies the way in which societies allocate their scarce resources to the production of goods and services that will meet your needs (always increasing). get all your updates about and The study of economics can be divided into two main camps. The theory of prices, or microeconomics, which explains how the interaction of supply and demand in markets with different levels of competition determine the prices of each property, the level of funds wages, profit margins and changes in income.
Microeconomy the assumption of rational behavior.
People spend their income trying to get the maximum satisfaction possible or, say economic analysts try to maximize their usefulness.
For their part, employers try to obtain the maximum benefit over its cost of production.
The second area of macroeconomics, understood the problems concerning the level of employment and the rate of income or income of a country.
The study of macroeconomics began with the publication of The General Theory on Employment, Interest and Money (1936), the British economist John Maynard Keynes.
Its findings on the stages of expansion and economic depression focus on aggregate demand or aggregate of goods and services by consumers, investors and governments.
According to Keynes, inadequate aggregate demand to generate employment, the investment solution would increase business investment or public spending, although this is necessary to have a budget deficit.
II. Major schools of economic thought over time
Economic issues have preoccupied many intellectuals throughout the centuries. ‘s head portfolio manager is holds an MBA In ancient Greece, Aristotle and Plato spoke on issues related to wealth, property and commerce. During the Middle Ages ideas were predominant in the Church, canon law was imposed, which condemned usury (charging interest abusive for cash) and believed that trade was a less than agriculture.
Economics, modern science as separate from philosophy and politics, dating from the publication of research work on the nature and causes of the wealth of nations
(more commonly known by the abbreviated title of the Wealth of Nations, 1776), Scottish philosopher and economist Adam Smith.
Mercantilism and the speculations of the preceding physiocrats classical economics of Smith and his followers in the nineteenth century.
The development of modern nationalism throughout the sixteenth century to divert attention from the thinkers of that time as to increase the wealth and power of national states.
The economic policies that prevailed at that time, the commercialism, promoting self-sufficiency of nations. This economic doctrine Impero in England and elsewhere in Western Europe since the sixteenth hedge funds century until the eighteenth century.
The mercantilist view that New York Stock Exchange the wealth of a nation depended on the amount of gold and silver to take. Apart from gold and silver mine discovered by Spain in the Americas, a nation could only increase its reserves of precious metals to sell more products to other countries in buying.
Getting a balance of payments surplus implies that other countries had to pay the difference between gold and silver.
The mercantilist assumed that his country would always be at war with others, or preparing for the next contest. If they had gold and silver, the leaders could pay mercenaries to fight, as did investment management King George III of England during the War of American Independence.
If necessary, the monarch could also buy weapons, uniforms and food for the soldiers. Jean. B. Colbert (1619-1683), minister of Louis XIV, institutionalized the export of French products to create gold and whose impact development on a very important industry gala.
This concern mercantilista to accumulate precious metals also affects the internal politics. It was imperative that wages were low and the population grows. Large populations and low-paid produce many goods at a price low enough to sell abroad. Forcing people to work long hours, and was considered a wasteful consumption of tea, gin, silk fabrics, among others.
This philosophy also showed that it stocks was good for the economy of a country child labor. Mercantilista an author had a plan for the children of the poor:
“When these children are four years, we must take refuge for the poor of the region, where they were taught to read for two hours a day, and they have NYSE the rest of the day working on tasks best suited to their age strength and capacity.